Minn. Stat. §480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Fosston High School,
Commissioner of Economic Security,
Minnesota Department of Economic Security
Agency File No. 2750 UC 97
Thomas T. Smith, Smith Law Firm P.A., 115 Fifth Street NW, Bemidji, MN 56601-3004 (for respondent/employer)
Kent E. Todd, Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent/commissioner)
Considered and decided by Huspeni, Presiding Judge, Schumacher, Judge, and Mulally, Judge.
*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, § 10.
Relator Debra A. Kolden appeals the Commissioner of Economic Security's denial of reemployment insurance benefits, arguing her behavior did not amount to ordinary misconduct or gross misconduct. We affirm.
Kolden was employed as a full-time bookkeeper with Independent School District No. 601 in Fosston, Minnesota, from August 22, 1995 to February 10, 1997. Kolden was primarily responsible for the district's finances. Kolden's job duties involved 1) accounting for funds from Fosston High School's organizations and activities accounts; 2) paying bills; 3) reconciling invoices with purchase orders; 4) preparing monthly financial statements; and 5) computer data entry. Kolden handled most of these responsibilities on her own. When cash from the various activities accounts was received in the office, Kolden and two other secretaries in the office would write a receipt for that cash and deposit the funds in Fosston's bank. One of the activities accounts was the concession fund, consisting of receipts from sales of food at school athletic events.
In early January 1997, the concession fund showed a loss for the year. This was the first Fosston became aware of cash shortages and it began a series of safeguards to protect the cash funds. These safeguards included a) placing the money in the vault; b) monitoring the five people who had access to the funds; c) careful counting; d) ensuring money was always escorted by two persons; e) keeping detailed records; and f) counting the various funds every few days. After implementing these safeguards, Fosston noted numerous shortages ranging in amounts from $9.72 to $122 between January 13, 1997, and February 10, 1997.
Based on these cash account discrepancies and the fact that Kolden was the only unsupervised employee with access to those accounts, Fosston suspected her of taking the money.
During Fosston's investigation into the missing funds, they learned Kolden had taken money in the form of cashing personal checks. The procedure for such a transaction is to have someone other than the person cashing the check place the check in the account and remove the cash. Kolden did not follow this procedure in December 1996 when she wrote a $200 check for cash to Fosston. Instead, Kolden exchanged the check for money from one of the cash accounts herself.
On February 10, 1997, Fosston terminated Kolden for theft. Fosston then reported Kolden to the sheriff's department. An investigator with the sheriff's department conducted an interview with Kolden regarding the cash discrepancies. During the interview, Kolden admitted to borrowing cash and cashing five to ten personal checks from Fosston's accounts. Kolden also admitted to the investigator that she was occasionally unable to pay back lump sums in the amount of $60. Rather, she would deposit $20 installments over "a week or so." Kolden said sometimes "IOU's" documented these "loans" and sometimes she "forgot" to memorialize the "loans." She also admitted to the investigator that she may have forgotten to repay some of the money she borrowed but not more than $100. Kolden's statements at the hearing for reemployment insurance benefits, however, contradicted what she said to the investigator. At the reemployment hearing, Kolden stated, "All the money was replaced." Furthermore, she testified she only borrowed money on two occasions, not five or ten.
Fosston does not have a written policy that either allows or prohibits employees from borrowing money from the various cash funds. Fosston's superintendent, however, is not aware of an employee ever borrowing money "for a short term" from one of those accounts.
On appeal, the commissioner's representative reversed the reemployment insurance judge's decision and found Kolden had taken in excess of $200 from Fosston's cash account without authorization or documentation. The commissioner's representative decided such acts constituted gross misconduct and disqualified Kolden from receiving reemployment insurance benefits under Minn. Stat. § 268.09, subd. 1(b) and (d) (1996).
In reviewing a decision of the commissioner's representative, our scope of review is very narrow. Markel v. City of Circle Pines, 479 N.W.2d 382, 383-84 (Minn. 1992). Findings of fact are viewed in the light most favorable to the decision and will not be disturbed if there is evidence reasonably tending to sustain them. Id. at 383-84. Determining whether an employee committed misconduct, however, is a question of law upon which this court is free to exercise its independent judgement. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).
An individual who is terminated for gross misconduct is not entitled to receive reemployment insurance benefits. Minn. Stat. § 268.09, subd. 1(d) (1996). Gross misconduct includes:
misconduct involving assault and battery or the malicious destruction of property or arson or sabotage or embezzlement or any other act, including theft, the commission of which amounts to a felony or gross misdemeanor.
Id. (emphasis added). Theft of public funds belonging to the state or any political subdivision or agency thereof is classified as a felony. Minn. Stat. § 609.52, subd. 3(3)(d)(iv) (1996).
Kolden admitted in her interview with the investigator from the sheriff's department that she had on occasion borrowed money from the various accounts and may have "forgot" to pay some back. Kolden also admitted that she did not always document these "loans" and that she could not remember the exact number of times or dates on which she made these transactions. Kolden was unable to specifically recall the last time she had borrowed money.
In addition, Fosston's superintendent testified that, although Fosston did not have a written policy prohibiting employees from taking loans out of the various cash accounts, she was not aware of any employee ever borrowing money from one of those accounts.
In consideration of this court's standard of review, the commissioner's representative had sufficient evidence to determine that Kolden had taken money without authorization or documentation from Fosston.
As a bookkeeper, Kolden's behavior, unknown to others, of floating herself loans from public funds and failing to repay it, constitutes theft. The commissioner's representative did not err when it determined that Kolden had committed gross misconduct and disqualified her from receiving reemployment insurance benefits.
Notwithstanding the commissioner's finding of gross misconduct, Kolden argues that Fosston failed to establish ordinary misconduct. Our supreme court defines ordinary misconduct as conduct which shows wrongful intent, evil design, deliberate violations, or disregard of standards of behavior, which the employer has the right to expect of his employee. Tilseth v. Midwest Lumber Co., 295 Minn. 372, 374-75, 204 N.W.2d 644, 646 (1973). Kolden claims Fosston provided no evidence demonstrating that her behavior was anything but ordinary negligence, mere inefficiency, or unsatisfactory conduct and is, therefore, insufficient under Tilseth to disqualify her from reemployment benefits. Id. at 375.
Kolden bases the assertion that her behavior does not constitute misconduct on the fact that Fosston does not have a written policy prohibiting employees from taking undocumented loans from its cash funds. The fact that Fosston does not have a written policy prohibiting employees from "borrowing" money does not prohibit an employer from the reasonable expectation that an employee will not "borrow" money and forget to pay it back. Requiring such an expectation in writing contradicts a standard of behavior an employer has a right to expect from his employee charged with the fiduciary duty of handling the employer's finances. Thus, Kolden's conduct meets the definition of ordinary misconduct set forth in Tilseth.